Does Walmart's new organic foods venture pose a threat to Whole Foods?
In April, big box chain Walmart announced it would carry organic food products, claiming that its Wild Oats packaged goods will save customers “25 percent or more” compared to other national brand organic products.
What Exactly Is Organic?
At least 95 percent of a product’s ingredients must be produced without using “most conventional pesticides, fertilizers made with synthetic ingredients or sewage sludge, bioengineering or ionizing radiation,” according to the Academy of Nutrition and Dietetics.
Until now, most organic foods have cost more than non-organic foods because, as Wild Oats CEO Tom Casey told NPR, the “production and distribution of organic food is still highly fragmented,” meaning they are not done on a large enough scale to become cost effective. Walmart’s plans to sell more than 100 organic products at more than 4,000 stores across the U.S. should increase the efficiency of organic food production, thereby dropping costs.
Consumer Reports put together a comparison of Wild Oats products and the best possible deals they could find at supermarkets around Yonkers, New York. We decided to see how Walmart’s prices measure up to the prices at popular organic grocer, Whole Foods. Check out the chart below to see what we found.
(Interesting side note: Wild Oats started out in Boulder, Colorado in 1987. Whole Foods bought Wild Oats in 2007 for $565 million, then was forced to sell the brand in 2009 because of antitrust concerns.)
Whole Foods prices reflect the lowest organic prices found at Whole Foods in Torrance, California, on May 5. Walmart prices were first reported by the Consumer Reports. Groceries prices can vary widely by state and city, making comparisons difficult.*
In most cases, Walmart’s organic offerings are significantly cheaper than those found at Whole Foods. If you think that has Whole Foods scared, though, think again. As Whole Foods CEO Walter Robb told CNBC, “Of all the customers in the market, their customers overlap the least with ours.”
*This paragraph was modified to clarify that we have not conducted a direct comparison and that prices vary widely across states. The chart has also been updated to reflect the lowest product prices from the Torrance, California, Whole Foods. An earlier version of this piece overstated the cost of four products found at the Torrance Whole Foods.